Hims & Hers Health (HIMS) is drawing attention after law firms began investigating allegations that the company shared sensitive user health data with third parties without proper consent, raising questions about privacy practices and regulatory risk.

Set against a 1 day share price decline of about 9.4% and a 7 day share price return that is also lower, Hims & Hers Health still shows positive momentum over 30 and 90 days. However, the 1 year total shareholder return is weaker than the very large 3 and 5 year total shareholder returns.

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After the sharp pullback and fresh privacy questions, Hims & Hers Health now trades above both its analyst target of US$28.42 and an estimated fair value. Is this a healthy premium, or a sign the market is too relaxed about the risks?

Most Popular Narrative: 80.5% Undervalued

Compared to Hims & Hers Health's last close at $33.68, the most followed narrative pegs fair value near $173, pointing to a large valuation gap built on aggressive growth and profitability expectations.

Over the long term (10yrs), Hims & Hers has an unusually large addressable market ahead of it. The company’s growth is driven by three reinforcing dimensions:

• Expanding market size: digital healthcare adoption continues to grow globally

• Category expansion: new offerings such as hormonal health, longevity, and sleep

• International scaling: multiple geographies already in the pipeline (e.g. Brazil, Australia)

• Growth inside of the current categories

Want to understand why this narrative sees huge upside for Hims & Hers Health? It leans on rapid revenue compounding, rising margins, and a rich future earnings multiple. Curious how those pieces fit together into a triple digit fair value and what assumptions have to hold for that price to make sense? The full narrative lays out the numbers behind that conviction.

Result: Fair Value of $173.02 (UNDERVALUED)

However, this bullish Hims & Hers Health narrative still hinges on resolving the privacy investigation cleanly and on execution matching those very ambitious revenue assumptions.

Another View: Hims & Hers Health Through The SWS DCF Lens

That bullish narrative on Hims & Hers Health sits in sharp contrast to our DCF model, which estimates future cash flow value at $3.86 per share versus the current $33.68. On that basis the stock screens as heavily overvalued. Which story should carry more weight in your process?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Hims & Hers Health for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 49 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

With sentiment clearly split on Hims & Hers Health, now is a good time to review the numbers, weigh the privacy headlines, and act on your own judgement using 1 key reward and 1 important warning sign

Looking for more investment ideas beyond Hims & Hers Health?

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• Spot potential value opportunities early by scanning 49 high quality undervalued stocks that combine quality fundamentals with discounted prices.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.